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Auditors Find Weaknesses in SJSU Fiscal Controls

Auditors from the California State University System find numerous weaknesses in SJSU fiscal and administrative oversight and issue 18 recommendations to address the problems. The report from the CSU Office of the Chancellor follows a series of NBC Bay Area investigations that exposed a department chair using university funds for personal expenses and the administrators who decided those actions amounted to “no fiscal impropriety.” Chief Investigative Reporter Tony Kovaleski reports in a story that aired on September 24, 2014. (Published Wednesday, Sept. 24, 2014)

San Jose State University is now on the clock to fix a series of internal breakdowns first exposed by the NBC Bay Area Investigative Unit. This week the California State University System’s Office of the Chancellor released an audit that found weaknesses in fiscal, operational and administrative controls at the university and inside the Justice Studies department.

The Investigative Unit uncovered in May that the former Justice Studies department chair, Dr. Mark Correia, got caught using university funds for personal expenses and making questionable spending decisions such as granting contracts to friends and using an unauthorized university checking account funded in part by SJSU students.

“Multiple offices seemed to really be involved in not crossing T’s and dotting I’s, which allowed someone like my former chair to game the system,” said Sang Kil, an associate professor in the Justice Studies department.

Kil blew the whistle on questionable practices inside her department and spoke out about them to NBC Bay Area.

“I think that going to the media and also contacting the student activists made all the difference in the world,” Kil said.

The university’s internal investigation initially found that Correia did not commit any “fiscal improprieties.” University president Mohammad Qayoumi called in auditors from the CSU system's Office of the Chancellor for a review of all contracts and financial transactions in the department, following the NBC Bay Area report. The audit found that “the mere existence and use of an off-campus account could be viewed as a suspected fiscal impropriety.”

The audit also found breakdowns that lead to 18 recommendations for San Jose State. Areas of concern include use of the unauthorized off-campus bank account, lack of administrative oversight, problematic contracting practices and questionable spending from campus and foundation accounts.

Feinstein, who took over as provost last summer, said that he intends to address the issues noted by CSU auditors. Following the release of the audit, Qayoumi issued a statement to students and faculty that included, “I expect you may share my deep disappointment at so many troubling breaches of trust, policy and protocol.”

The SJSU president plans to implement the recommendations by the end of the year by providing extra training, clarifying staff responsibilities and implementing new procedures. Funds maintained by the former Justice Studies department chair have been recovered and moved into a university-controlled account.